The SoftBank Group continues to receive the short end of the stick. In contrast to that time last year, Softbank reported losses of a staggering $ 13 billion (1.7 trillion yen) in the fiscal year ended March 31. SoftBank had a good profit last year, amounting to an impressive 4.99 trillion yen.

Last year’s SoftBank peaks were due to the impressive performance of a number of technology conglomerates, most notably South Korea’s e-commerce platform Coupang and startup Grab from Southeast Asia.

The fiscal year was difficult for all VC groups in general, but the perfect storm was ripe for SoftBank, whose moves are being monitored by CEO Masayoshi Son. Stock prices for both Coupang and Grab fell sharply, around 60-70%.

While the whole world was shaking from the aftermath of the Russia-Ukraine war, SoftBank had many other problems. The Chinese administration’s crackdown on the technology sector, along with rising federal interest rates, has brought down the stock prices of technology companies. SoftBank’s strategy is a direct blow as all these factors combine.

Coupang and Grab were among the biggest disappointments for the VC group, but the undisputed leader in their losses was Chinese startup Didi, which went public last year, only to be removed from the Chinese regulatory storm to the point of being removed from the list. American indices. Chinese e-commerce giant Alibaba has also become a concern for them, as Alibaba has also seen a sharp decline as a result of Chinese regulatory measures.

SoftBank failed to rank in 32 of the 34 companies in their portfolio. The main contributors to this poor performance are Coupang ($ 5.4 billion), Grab Holdings Ltd. ($ 2.4 billion), Didi ($ 2.4 billion), Paytm ($ 1.3 billion) and food delivery company DoorDash Inc. ($ 1.1 billion).

As investor confidence began to fall along with the share prices of their portfolio companies, CEO Masayoshi Son acknowledged the losses and acknowledged that SoftBank must move to defense. In a call for earnings on Thursday, Son said he could seek to halve his start-up investment margins. “It depends on our LTV levels and investment opportunities and we strike a balance, but I will say that compared to last year, the amount of new investment will be half or maybe even a quarter,” he said.

In the previous quarter, ending March 31, Softbank invested $ 2.5 billion, well below the previous quarterly figures of $ 10.4 billion, $ 12.8 billion, $ 20.9 billion and $ 11.3 billion.

SoftBank is a vital part of India’s venture capital ecosystem, as they support many well-known companies, including Paytm, Flipkart, Ola, Oyo, Swiggy, Delhivery, InMobi and Lenskart. In the last fiscal year, the Indian company Policy Bazaar generated a profit margin of $ 300 million. The blow to their reputation is also very visible in the Indian market, because despite their history of turning companies into unicorns, with CommerceIQ being the latest, Delhivery was anything but happy with the prospect of a check from SoftBank.

Dan Baker of Morningstar Inc. remains confident of the group’s future, as despite the instability in their strategy, SoftBank is simply too big to deviate from a failure like this. “It’s not for everyone, but if you’re willing to accept instability, then if you look at the company’s long-term performance, it’s actually pretty decent,” he said.

https://thetechportal.com/2022/05/12/softbank-tech-startup-investment-vision-fund/

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